welfare

“Activists” try my patience, and exhaust it. Their message — no matter the particulars of content or phrasing — boils down to this: Government should “do something” about “something.” This is a formula that has been invoked since the beginning of the Republic, though increasingly more often since the onset of the Progressive Era in the late 1800s. The exhortation betrays three beliefs, unconscious as they may be on the part of those who do the exhorting.

The first belief is that a particular phenomenon is so important — in the view of the exhorting person or group — that government should contrive to impose a particular outcome with respect to that phenomenon — regardless of the costs of that imposition, in treasure or liberty.

The second belief is a kind of prediction that proponents of government action usually cannot be bothered to test. This kind of prediction is known as the Nirvana fallacy: the logical error of comparing actual things with unrealistic, idealized alternatives. The actual things are the “somethings” about which government is supposed to “do something.” The unrealistic, idealized alternatives are the outcomes sought by the proponents of a particular course of government action. Thus legislation and regulation by mere mortals is taken as the functional equivalent of fiat lux.

This points to the third belief, which is that government — a mere creation of fallible, squabbling, power-lusting humans — is a kind of omniscient, single-minded, benevolent being that can overcome the forces of nature and human nature which gave rise, in the first place, to the “something” about which “something must be done.”

The evidence against these beliefs is so overwhelming that their persistence must be attributed to the psychological phenomenon summarized by Samuel Johnson as “the triumph of hope over experience.”

Proponents of government action will counter with the excuse that “something must be done” because of “market failure,” which is the failure of markets to produce outcomes preferred by the proponents. And yet they overlook government failure, and often seek to rectify it by exhorting more government action, which leads to more government failure, and so on.

Here are some salient examples of government failure — and its correlate, misfeasance — that ought to (but will not) give pause to the “do something” crowd:

“Entitlements” (Social Security, Medicare, Medicaid, and their expansion through Obamacare) — These programs grew from an understandable (but ill-advised) urge to provide for the elderly who were seen as unable to provide for themselves. Through the predictable processes of constituency-mongering, the “social safety net” has acquired almost-inviolable status as a subsidy for millions of persons who could well provide for themselves. This dependency has discouraged thrift and, in the process, stripped away a key source of funds for investments in economic growth. The looming burden of taxation promises to cripple an already hobbled economy.

Welfare, the Minimum Wage, and Affirmative Action — Altogether, these programs have succeeded in breaking up black families, denying to many young blacks an opportunity to join the ranks of the economically productive (and to advance on their own merit), fomented crime, caused racial resentment, and positioned aspiring black students and professionals for failure.

The Great Depression and the Great Recession — These two devastating economic downturns, one of which became an excuse for the enactment of Social Security and the other of which still lingers, are quintessential examples of government failure. In the case of the Great Depression, the Federal Reserve’s monetary policies (first too loose, then too tight) caused a recession to deepen into a depression. That depression lingered for almost a decade (and ended largely because of a catastrophic war) because of interventionist, anti-business policies that began under Hoover and continued, with a vengeance, under Roosevelt. We owe the Great Recession to a combination of too-loose credit (the Fed again) and too-loose mortgage lending: a policy insisted upon by the Federal Reserve and influential members of Congress, and reinforced by their minions at Fannie and Freddie. “Wall Street” — as a willing maker of credit — deserves blame for the resulting financial meltdown and recession only in the way that a prostitute deserves blame for serving her clients.

Defense and Police Services — These are public goods, but not for the reason advanced by believers in public goods, namely, that they would not be provided voluntarily because too many of their beneficiaries would try to take a “free ride” on paying customers, which would drive the prices of defense and police services too high to attract enough customers to pay for them. That is an unproved assertion, which runs counter to everyday experience (e.g., charitable giving and voluntarism) and ignores the very high stakes that could drive major corporations and very-high income earners to combine in a joint defense of their considerable interests in the U.S. and abroad — a defense that would unavoidably benefit free-riders. In this regard, it is noteworthy that in 2007 the combined pre-tax income of households in the top quintile was $2.5 trillion and pre-tax corporate profits came to $1.7 trillion. It is arguable that a consortium of taxpayers and corporations could underwrite the cost of defense and police forces (including courts, prosecutors, etc.), which in 2007 came to about $900 billion ($662 billion for defense and $230 billion for justice). In 2007, for example, taxpayers in the top 10 percent of adjusted gross incomes paid more than 70 percent of federal income taxes collected from filers of individual and joint returns. Who do you think pays the lion’s share of the costs of defense and police forces? The answer, of course, is high-income taxpayers, directly and through taxes on corporate income.

Defense and police services are tax-funded not because they must be, but because there is something menacing about the thought of privately owned defense and police forces that could be employed in coups and oppressions. A main consequence of the “publicization” of America’s defense and police forces is that they afford a lucrative opportunity for various kinds of pork-barrel legislation (e.g., the location of military bases, the awarding of defense contracts, and patronage for political supporters), as well as the usual (and unavoidable) instances of waste, fraud, and abuse. Even worse are the fluctuations in political attitudes toward defense and policing, which in the ebb invite aggression and crime, and in the flow invite vast over-spending — though over-spending can be defended on the ground that it deters aggression and crime and thus the human and monetary costs that accompany them.

In any event, not even defense is a sacrosanct function of government, and its provision by government is far from an unmitigated blessing. If you think that I overstate the case against government-owned defense forces, consider that

They fought only one “popular” war in the past 100 years — a war that became “popular” only after the surprise attack on Pearl Harbor.

The thesis that Reagan’s defense build-up won the Cold War remains controversial.

The size of the defense budget rides on political whims more than on hard-to-come-by cold facts. Would it be worse if those with the most to lose took a direct hand in the provision of defense forces and in decisions about when to employ them? I doubt it.

* * *

Perhaps there are examples of “government success,” but these are hard to identify because the intervention of government usually forecloses the alternatives to which the “do something” crowd is blind:

benign neglect, where persons with a “problem” choose not to act on it because the cost of action is greater than its likely benefits.

Anyone who says that government can be “managed” by limiting it to certain kinds of activities (e.g., defense or welfare) while eschewing others (e.g., welfare or defense), merely deludes himself; “democratic” governments cannot and will not function without throwing money in all directions, in an effort to placate all constituencies. As a minarchist, I must admit to sharing this delusion, but I am beginning to think that anarcho-capitalism has merit, if only the right kind of anarcho-capitalists could be in charge of police and defense forces.

Anyone who says that such-and-such a government program will succeed in accomplishing a certain goal at a certain cost — and that the cost will justify the accomplishment — proves himself a presumptuous fool. I cannot truthfully say that government-provided police and defense forces are worth their cost in money and liberty, and I scorn anyone who believes that any other type of governmental endeavor is remotely worth its cost in money and liberty.
__________For more posts related generally and specifically to this one, go to “Favorite Posts” and browse at will.

Social Security, Medicare, and Medicaid do several bad things at once:

They crowd out prospective providers of retirement funds, medical insurance, and medical care.

They create “moral hazard” by lulling people into the false belief that they will be well-taken-care of in their old age, thereby making it less likely that they will put aside money for their old age.

They therefore cause under-saving and, thus, under-investment in those things upon which economic growth depends: innovation and business creation.

If growth were not hobbled, there would be far fewer people in need of welfare programs and far more money available for voluntary assistance to those who truly cannot care for themselves.

Libertarian purists (e.g., Donald Boudreaux and Bryan Caplan) like to criticize the critics of illegal immigration. In the minds of libertarian purists, national borders are merely statist concoctions. It is anathema to them that the United States exists primarily for the purpose of protecting its citizens and their liberty rights. (Well, it did exist for that purpose originally and for a long time, and it still does to some extent.) Libertarian purists seem to believe that, somehow, defense would be unnecessary and rights would be enforced even if the United States did not exist as a coherent, delimited entity. Good luck with that!

In any event, libertarian purists like to criticize those critics of illegal immigration who claim that (1) the lure of welfare benefits draws illegal immigrants and (2) illegal immigrants add to the burden on tax-paying Americans. My research into those issues may be out of date, so I might decide to update my old findings (contrary to an earlier suggestion that I would drop the subject). For the time being, I am content to note the following:

Like this:

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 56 other followers

The Battle Flag of the Army of Northern Virginia

On this blog, as in most places where it appears, the Battle Flag of the Army of Northern Virginia -- Lee's Army -- stands for deliverance from an oppressive national government and resistance to political correctness, not racism. (Click on the image and scroll to the last entry in my moral profile.)

On Liberty

What is liberty? It is peaceful, willing coexistence and its concomitant: beneficially cooperative behavior.

John Stuart Mill opined that "the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others." But who determines whether an act is harmful or harmless? Acts deemed harmless by an individual are not harmless if they subvert the societal bonds of trust and self-restraint upon which liberty itself depends.

Which is not to say that all social regimes are regimes of liberty. Liberty requires voice -- the freedom to dissent -- and exit -- the freedom to choose one's neighbors and associates. Voice and exit depend, in turn, on the rule of law under a minimal state.

Liberty, because it is a social phenomenon and not an innate condition of humanity, must be won and preserved by an unflinching defense of a polity that fosters liberty through its norms, and the swift and certain administration of justice within that polity.

The governments of the United States and most States have long since ceased to foster liberty, but Americans are hostage in their own land and have no choice but to strive for the restoration of liberty, or something closer to it.

Notes about Usage

"State" (with a capital "S") refers to one of the United States, and "States" refers to two or more of them. "State" and "States," thus used, are proper nouns because they refer to a unique entity or entities: one or more of the United States, the union of which, under the terms and conditions stated in the Constitution, is the raison d’être for the nation. I reserve the uncapitalized word "state" for a government, or hierarchy of them, which exerts a monopoly of force within its boundaries.

The words "liberal," "progressive," and their variants are in quotation marks because they refer to persons and movements whose statist policies are, in fact, destructive of liberty and progress.

Marriage, in the Western tradition, predates the state and legitimates the union of one man and one woman. As such, it is an institution that is vital to civil society and therefore to the enjoyment of liberty. The recognition of a more-or-less permanent homosexual pairing as a kind of marriage is both ill-advised and illegitimate. Such an arrangement is therefore a "marriage" (in quotation marks) or, more accurately, a homosexual cohabitation contract (HCC).

Comments & Correspondence

I have enabled comments on posts dated May 1, 2014, and later. Comments close five days after the publication of a post. If a post is no longer open for comment, or if you prefer to communicate privately, you may e-mail me at the Germanic nickname for Friedrich followed by the last name of the great Austrian economist and Nobel laureate whose first name is Friedrich followed by the 3rd and 4th digits of his birth year followed by the usual typographic symbol followed by the domain and extension for Google's e-mail service -- all run together.

If you submit a comment or suggestion by e-mail, I may acknowledge it or use it on this blog. But I may paraphrase what you say or edit it for the sake of concision, clarity, coherence, or brevity. I will not use your name unless you specifically authorize me to do so. Even then, I will put quotation marks around your name unless I am certain of your identity.